New EU measures against money laundering and terrorist financing:
The European Parliament has approved three bills on the financial provisions of the EU's anti-money laundering and countering the financing of terrorism (AML/CFT) policy.
The package consists of:
• “Single rule-book” Regulation: Provisions for customer due diligence (KYC), beneficial owner transparency (UBO) and the use of anonymous means such as crypto assets, and new entities such as crowdfunding platforms. It also includes provisions for so-called "golden" passports and visas.
• The 6th Amendment of the Anti-Money Laundering Directive, National provisions for supervision and Financial Intelligence Units, as well as for the competent authorities' access to necessary and reliable information, e.g. registers of beneficial owners and assets stored in free zones.
• The Regulation establishing the European Anti-Money Laundering Authority (AMLA): Supervisory and investigative powers to ensure compliance with AML/CFT requirements.
Prevention of Money Laundering and the Financing of Terrorism (AML/CFT)
According to the approved texts, entities such as banks, asset and cryptocurrency managers, real estate agents and high-level professional football clubs will have to verify the identity of their customers, what they own and who controls the company. They should also define detailed types of money laundering and terrorist financing risk in their area of activity and transmit the relevant information to a central register.
To limit cash and cryptocurrency transactions, limits are set up to €7,000 for cash payments and €1,000 for cryptocurrency transfers where the customer cannot be traced. Given the obvious risk of abuse by criminals, it is sought to prohibit abusive acquisition of citizenship by criminal investment schemes ('golden passport') and to impose strong controls to combat the use of residence permits by investment schemes ('golden visa').
Financial Information Units
Each Member State should establish a Financial Intelligence Unit (FIU) to prevent, report and combat money laundering and terrorist financing. FIUs should exchange information with each other and with competent authorities, as well as cooperate with AMLA, Europol, Eurojust and the European Public Prosecutor's Office.
Information on beneficial owners (UBO)
For early detection of money laundering and asset freezing schemes, national FIUs and other competent authorities should have access to information on beneficial owners, bank accounts and land registries. As certain goods are attractive to criminals, Member States should collect information on the ownership of goods such as yachts, airplanes and cars worth more than €200,000 or goods stored in free zones.
A beneficial owner is anyone who owns 15% plus one share or voting rights or other direct or indirect ownership rights or 5% plus one share in the mining industry or a company exposed to a higher risk of money laundering or terrorist financing.
Registries of beneficial owners (UBO Registry)
Information on beneficial ownership held in national central registers should be available digitally, in an official EU language plus English, and include current and historical information for a specified period. The entity responsible for the central registry will have the right to request from corporate and legal entities any information necessary to identify and verify their beneficial owners.
Access to information
Following the latest Court ruling, it was decided that persons with a legitimate interest, such as journalists, reporters, other media, civil society organizations, higher education institutions, should have access to the registry, including interconnected central registries.
AMLA to ensure consistent enforcement
The new AMLA will monitor risks and threats inside and outside the EU and directly supervise specific credit and financial institutions, classifying them according to their level of risk.
It will be able to extend the authority's competence to draw up lists of high-risk countries outside the EU, but also to powers to mediate between national financial supervisory authorities and resolve disputes, to supervise and investigate the national implementation of the single AML manual, to ensure stronger supervision of supervisory authorities in the non-financial sector and to receive complaints of complaints.
The legislative package will be discussed by the European Parliament and the Council and a rapid legislative process is hoped for. The AML authority will be operational in 2024 and will start the work of direct supervision shortly after, once the Directive is transposed and the new rules come into force.